My guess would be that the Lugol's is stirring up the candida, which can cause dandruff and itching. While you are working on your candida/thyroid issues -- with the spot-on and invaluable advice from Iolite on the Candida Support Forum -- you might try an anti-dandruff shampoo with zinc or selenium. See if that helps control the symptoms. I've used an after-shampoo rinse of cider vinegar for mild itching, but it might not be effective for what you're describing. Reducing your candida levels is ultimately what needs to happen.